Jio accuses Indian cellular trade body of foul play

India’s leading mobile operator group thinks the fact that the trade body lobbied on behalf of two others is proof of bias against it.

The trace body in question is the Cellular Operators Association of India (COAI), which apparently wrote to the Indian government yesterday to lobby for some kind of assistance for its members: Vodafone Idea and Bharti Airtel. The thing is Reliance Jio is also a member of the COAI and presumably doesn’t want its competitors to get extra help, so it’s not happy about the letter.

Jio communicated its displeasure at considerable length in a letter of its own to the COAI, which it also shared with Indian media. It characterised the COAI letter as having alleged an unprecedented crisis in the telecom industry and said it was shocked that the letter was sent before Jio had had the opportunity to contribute. It went on to say this is typical bad behaviour by COAI, which calls into question just how shocked Jio actually was.

“Evidently, submission of this letter… is another manifestation of COAI’s prejudiced mindset completely laced with the one-sided thought process,” continued the letter, warming to its theme. “By such unwarranted behaviour COAI has just proved that they are not an industry organization but just a mouthpiece of two service providers.”

It then bangs on about all the things that were wrong with the letter, which amount to the aforementioned bias in favour of Vodafone Idea and Bharti Airtel. Jio clearly doesn’t want its rivals to get any help from the government, and even went so far as to insist that the disappearance of its two main competitors wouldn’t harm competition, which feels like a bit of a reach.

Neither the COAI nor the Indian state seemed to have responded to the letter at the time of writing, but they both seem to be stuck in the middle of an increasingly acrimonious war between Jio and the incumbents whether they like it or not. This is what happens when the state pokes its nose into the commercial sector too much. It created a very benign regulatory environment for Jio and is now staring at a potential monopoly. Nice one.

China’s state telcos will flick on the world’s largest 5G network on Friday

State-owned telecoms operators in China will switch on their 5G networks for the first time on Friday as Beijing aims to catch up with the US.

China Unicom, China Mobile, and China Telecom will launch 5G services on Friday with prices starting from 128 yuan per month, equivalent to approximately $18/month.

Beijing initially planned to launch 5G services early next year but have accelerated their plans amid increased trade tensions with the US.

As of Friday, China will have the largest commercially-operating 5G network in the world. The latest generation network will improve speeds and reliability for consumers while allowing businesses to pursue new use cases such as driverless cars.

Chris Lane, and other analysts at Sanford C. Bernstein, wrote in a note to clients on Wednesday:

“While some other countries launched 5G services earlier this year, China will have the largest commercial operating 5G network in the world on Friday.

The scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain.”

Over 50,000 5G base stations are planned to be installed by the end of 2019. Most of the major cities – including Beijing, Shanghai, Guangzhou, and Hangzhou – already have full 5G coverage.

Chinese telecoms equipment giant Huawei has found itself in the crossfire between the US and China, with the former claiming the company is controlled by Beijing and poses a national security threat. The US has been strongly pressuring its allies to ban Huawei's 5G gear from their own national rollouts.

Huawei is expecting some relief from its recent troubles, and an uptick in revenue, as a result of China's 5G rollout both through the sale of infrastructure equipment and supporting consumer devices such as smartphones.

Interested in hearing industry leaders discuss subjects like this? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo, and Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London, and Amsterdam.

Sharing, selling and standardizing – the great spectrum conundrum

With the World Radiocommunication Conference currently underway in Egypt, it’s timely to discuss some of the spectrum issues facing the industry today.

Spectrum is and will probably remain a hot-topic for the industry due to its critical importance. The success of a telco is partly defined by the spectrum licences it is able to horde, and depending on where you are in the world, the scarcity of these assets varies. That said, to describe anywhere as having an abundance would be foolish to say the least.

Starting with the idea of selling spectrum, this is a topic which is under constant debate, review and criticism.

“When you talk about spectrum, the price you have to pay always has an impact on the rollout strategy,” said Jasper Mikkelsen, Director of Public and Regulatory Affairs for the Telenor Group, during a panel session this week.

This is where the balancing act is at its finest. The regulators will argue they need to charge for access to spectrum for several reasons, but the price of spectrum is often the centre of criticism in various markets. Mikkelsen pointed out during the auctions in Thailand earlier this year, many of the spectrum assets went unsold due to the reserve prices assigned to the lots.

However, according to Donald Stockdale of the FCC, the complaints from telcos might have some merit. If spectrum is unsold at the end of the auction, this is most likely due to the auction being badly designed. Perhaps not enough was released, the channels hadn’t been cleared effectively, the reserve price was too high, or the obligations attached to the winning assets were deemed unreasonable by the telcos.

Telcos will always complain and point to markets where spectrum is effectively given away for free, however there are cases where they have a point. If such a valuable asset is remaining unsold, despite the pleas of telcos to free-up more spectrum, there is perhaps something wrong with the product itself.

What is worth noting is that the auction process is not perfect. There will always be complaints and criticism, though it is currently the least worst option. It is certainly better than the ‘beauty contest’ concept, which leaves the door wide open to corruption.

How to design and manage spectrum auctions is more of a ‘trial and error’ process, which will come as little comfort to those shelling out the investments, however the idea of standardising is something which should certainly be given more traction.

This will of course be a topic of conversation for at the World Radiocommunication Conference, especially concerning the higher frequency airwaves, though there is still a lot of work to do on the spectrum licenses which are already a hotch-potch of complexity.

While there is work being done to standardise spectrum across various different regions, this is a lot more complicated than just simply creating new rules. Bureaucrats have to deal with the dreading concept of legacy.

As Michael Sharpe, Director of Spectrum and Equipment Regulation at ETSI, pointed out there are 48 countries in Europe, all of which have been assigning spectrum to different usecases, products and services over the last few decades. Harmonisation is a topic of conversation now but unravelling the maze of red-tape which already exists in each of these nations is a very complex task.

First and foremost, there are some very attractive benefits from standardisation. In a region like Europe, the risk of interference is present, driving the case, while there are also be benefits driven through interoperability or economy of scale, however there will always be a downside.

Looking at Europe once again, the congestion of certain bands will vary depending on the demands of the nation, while the cost assigned to clearing these costs will certain vary quite considerably. Then you have to look at the idea of flexibility.

Politicians generally don’t like being told what to do, and they like it even less when it comes from bureaucrats over which they have very little influence. In designing a harmonised approach to spectrum allocation and usage, flexibility will need to be built into the process to ensure each nation can address the specific needs of dominant industries and the nuances of societal variance.

This is of course very difficult to judge the right balance, but it is a critical element not only to ensure economic prosperity in each of the nations, but to make sure the rules are adopted by the Governments in question. If it is too much of a hinderance or costs too much to clear the bands, who is to say these suggestions are not just simply ignored, these are sovereign states after all.

The final area which is attracting some attention out of the US is a spectrum sharing initiative out of the FCC.

Focusing specifically on the valuable 3.5 GHz spectrum band which is being championed in Europe to deliver the first 5G services, the FCC is trialling a dynamic spectrum sharing project. Known unofficially as the ‘Innovation Band’, it offers a palatable compromise between high-speed data transmission and extended coverage. However, the US has found itself in a bit of a pickle as the current incumbent on this spectrum band is the Navy.

The spectrum is currently utilised by the Navy in offshore radar operations, however it is not being used all the time, such is the nature of naval operations. For such valuable spectrum, this is largely viewed as a waste.

Stockdale highlighted the team has created a three-tier, demand-orientated system, where spectrum is utilised dependent on the presence of those in the tier above. The Navy has the right to use the band first and foremost, though when it become unutilised, mobile service providers can purchase licenses to gain access for the second tier. Should the Navy or the telcos not be making use of the spectrum, it can be assigned for general use for those approved in the third-tier.

Although this is only a trial for the moment, it demonstrates the point made above. Flexibility needs to be built into spectrum harmonisation initiatives, as it is unrealistic to repurpose this band in the US. The cost and effort are unlikely to be justifiable when you consider the size of the US Navy.

This is an excellent example of innovation when looking at spectrum, and regulators around the world should be paying attention to the lessons learned through this experiment. The idea of dynamic spectrum sharing could be huge if the fundamentals are validated here, such is the demand for this valuable and increasingly scarce resource.

This is of course not the only example of spectrum being repurposed in regions where it is not being utilised. In the UK, Ofcom has introduced rules which dictate unused spectrum must be released, assuming there is demand.

Vodafone recently announced it entered into a three-year agreement with StrattoOpencell to share the use of it 2.6 GHz spectrum assets to deliver connectivity in Devon. The spectrum licences are being used in highly-urbanised areas, but not in the countryside, therefore it is inefficient use of the asset without these rules from the regulator.

Although spectrum is a topic which has been the centre of many debates, it does appear it will be an ever-lasting ebb and flow. The World Radiocommunication Conference will likely free-up some more spectrum, but the TMT industry is very good at finding ways to use it. Scarcity is most likely going to persist, though there are some interesting conversations evolving to improve this niche of the mobile segment.

Apple continues its transition from products to services

Quarterly revenues for gadget giant Apple were up year-on-year but down for the full year, as the company increasingly relies on services.

The headline of Apple’s latest quarterly announcement read: ‘Services Revenue Reaches All-Time High of $12.5 Billion’. This achievement masked the fact iPhone revenues continue to decline, which in turn dragged full year revenues into the red. On the whole, however, these were solid results for Apple and it seems to be managing its strategic transition well.

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad,” said Tim Cook, Apple’s CEO. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

The services side of things was the focus of the tech press in its analysis. Apparently Apple pay transaction volume overtook that of PayPal in the most recent quarter. A significant initiative that illustrates the symbiosis of the services and hardware side is Apple’s decision to offer interest-free financing of new iPhones through its own credit card. This will also be a significant blow for the postpaid phone contract sector as subscribers will no longer be dependent on operators for handset financing.

The fact that iPhone shipments are declining is not disastrous, so long as Apple maintains the massive iOS installed -base. As the Apple Pay numbers show, Apple’s services are bound to do well so long as there are lots of iPhones in use. The financing initiative implies Apple is worried about that installed-base declining, however, and may not be the last time we see Apple further incentivising people to buy iPhones.

The columns in the table below are as follows: fiscal Q4 2019, Q4 2018, full fiscal year 2019, full year 2018.

Revenues are down, but BT looks ready to do battle

Total revenues and profits might have slipped slightly at BT, though it met expectations and it seems the business is lining-up its pieces for an assault on the UK market.

With the assets the telco has at its disposal, BT should dominate the market leaving the scraps for rivals to fight over, but this has not been the case. There have been some lavish spending sprees over the last few years, though the refreshed management is taking a more network-orientated approach as opposed to the ‘bells and whistles’ of the previous regime.

“BT delivered results in line with our expectations for the second quarter and first half of the year, and we remain on track to meet our outlook for the full year,” said CEO Philip Jansen.

“We’ve invested to strengthen our competitive position. We’ve accelerated our 5G and FTTP rollouts, introduced an enhanced range of product and service initiatives for both consumer and business segments, and announced price and technology commitments to deliver fair, predictable and competitive pricing for customers.”

Capital expenditure for the first six months of 2019 was £1.88 billion, up £225 million year-on-year, although this excludes the grants from the Broadband Delivery UK (BDUK) programme. Such increase should come as little surprise as the team has been enthusiastically shouting about 5G launches across the UK (now up to 20) as well as new homes which are being passed with fibre (23,000 per week) in pursuit of the Government’s lofty full-fibre goals.

In years gone, BT looked like a telco which was defined by its challenge to Sky in the content market, while few could recognise the synergies with EE. The BT of today looks very different, thrusting the connectivity assets to the centre of the business. With the convergence business model proving its worth in various European markets, see success at Orange for evidence, BT is taking inspiration.

With the fixed network in the UK, which is being aggressively fibred-up, 30 million mobile subscribers, five million wifi hotspots and a new TV proposition to be launched at some undefined point, the cross-selling opportunities are abundant should BT be able to nail the experience on the assets. This seems to be the focus of investments under Jansen, instead of going for the glamorous, the team is concentrating on delivering the core connectivity experience and then bundling on additional added-value options.

Across the business, the Average Revenue per Consumer (ARPC) for broadband remained relatively flat at £38.5 per month, while postpaid mobile decreased to £20.8, down 5.5% though as this has been attributed to new regulation and the SIM-only trends it is nothing too be too concerned about. Interestingly enough, the number of Revenue Generating Units (RGUs) per household has increased to 2.38. This is where the convergence strategy could make a very positive impact.

As a business model, convergence is more efficient and creates higher customer loyalty and NPS. Bundled at a suitable price-point, and it looks like a very attractive offer to steal subscriptions from rivals also. However, experience does have to be very high across the entire portfolio, hence the increased spend on the network over recent months.

This is where BT could be a very interesting business over the next couple of months. The ‘Halo’ converged products could attract interest, especially when the hotspots are bundled in also. Rivals might be able to compete with BT with a few bundles, but no-one can offer the same breadth across mobile, broadband, wifi and content. This is a massive advantage, and BT should be shouting and screaming.

We might have to wait a couple of months before the refreshed TV proposition is fully polished, but this is another reason why no-one should worry too much about the slipping revenues for H1. BT is still lining up the various pieces before an aggressive push with the full convergence offer. It has been suggested the TV proposition will not be ready until the new year.

With its assets, BT should be untouchable. It still has work to do on the fibre rollout, 5G deployment, finalising the TV offer, improving the wifi experience and aligning the BT and EE brands, but the ‘Halo’ converged offer could create some serious noise.

2019 First Half Financials
Total Revenue £11.467 billion (1%)
Profit before tax £1.333 billion n/m
Profit after tax £1.068 billion n/m
Basic earnings per share 10.8p 2%
Capital expenditure £1.882 billion 3%
Business units
Consumer £5.194 billion (1%)
Enterprise £3.055 billion (5%)
Global Services £2.196 billion (6%)
Openreach £2.356 billion n/m

n/m = not-meaningful

Samsung smartphone recovery overshadowed by semiconductor gloom

Samsung’s Q3 2019 numbers show improved performance in the smartphone business, but the semiconductor sector remains weak, which contributed to the 56% decrease in corporate level operating profit.

Overall the company has delivered sequential improvement over Q2. Total revenues stood at KRW 62 trillion ($53 billion), representing a 10% QoQ improvement despite being 5% lower than the same quarter a year ago. The corporate level operating profit of KRW 7.78 trillion ($6.7 billion) was 56% lower than a year ago, albeit registering a growth of 18% over the previous quarter.

The IT & Mobile communications group, which includes the smartphone and mobile network businesses, now the biggest revenue generator of the company, delivered the strongest recovery. Total income from mobile handsets, predominantly smartphones, amounted to KRW 28.1 trillion ($24 billion), a 17% increase over a year ago, and 16% over last quarter.

More impressive was the profit growth: operating profit at the business group level grew by 31.5% year-on-year, and 87% quarter-on-quarter. The company attributed the profit improvement to “a product mix improvement and cost reduction after a lineup transition” including contributing from the new phablet Note 10 as well as the entry level A series. The “extended technology leadership via launch of Galaxy Fold and additional 5G models” also helped. At the last IFA show in September Samsung announced it had already shipped 2 million 5G phones and expected the volume to exceed 4 million by the end of 2019. Samsung is believed to have increased its smartphone market share to 21%, retaining the global leadership.

In contrast to the smartphone business’s recovery was the continued depressed performance of the Device Solutions group, which includes the semiconductors and display panel businesses, and is by far Samsung’s biggest profit generator. To illustrate the importance of this group to Samsung’s overall performance, the group level revenue, KRW 26.64 trillion ($23 billion), represented 43% of the company’s total revenue, but the operating profit, KRW 4.24 trillion ($3.6 billion), accounted for 55% of the total operating profit of Samsung Electronics, at a 16% operating margin. In comparison, the IT & Mobile group’s operating margin was at less than 10%.

The memory chip sector was particularly weak, where the revenues went down by 37% from a year ago to reach $13.26 trillion ($11 billion) although it was an 8% improvement from last quarter. The operating profit collapsed to KRW 3.05 trillion ($2.6 billion), a mere 22% of the level a year ago, and also more than 10% drop from an already weak Q2. This indicated increased demand for shipment but at depressed price levels.

Looking at Q4 and 2020, Samsung believes 5G will have a big impact on the company’s performance. It foresees that the profitability of the smartphone business will continue to be a challenge in Q4 “due to weaker mix from dissipating new model effects of Note 10 and increased marketing cost under strong seasonality”. For 2020 this group will “enhance competitiveness throughout entire lineup and by addressing growing 5G demand; strengthen foundation for further sales growth, mainly driven by foldable; expand sales of premium models and optimize operations for low-end to mid-range models to improve profitability.”

For the semiconductor sector, Samsung expects the demand for memory chips to be solid in Q4 as clients are replenishing inventory again, although it does note “uncertainties likely to linger due to issues in the external environment.” The system large-scale integration (S.LSI) business expects growth in “shipments of 5G 1-Chip SoC and 64Mp & 108Mp high-resolution image sensors”.

Global smartphone market returns to growth, driven entirely by Samsung and Huawei

Shipments in the global smartphone industry returned to growth for the first time in two years according to the latest numbers from Strategy Analytics.

A total of 366 million smartphones were shipped in Q3 2019, which is 2% up on the year-ago number. Only two vendors experienced growth themselves, however, with market leader Samsung up 8% and second-placed Huawei up 29%. Huawei has doubled its share of the global smartphone market in the past three years, largely at the expense of the long tail, with once prominent brands like Sony, HTC and Alcatel being swallowed up.

“Samsung shipped 78.2 million smartphones worldwide in Q3 2019, jumping 8 percent annually from 72.3 million units in Q3 2018,” said Neil Mawston of SA. “Samsung has lifted its global smartphone marketshare from 20 percent to 21 percent in the past year. Strong sales of the premium Galaxy Note 10 and mass-market A Series models boosted Samsung’s smartphone shipments and profit during the quarter.

“Huawei once again surprised everyone and grew its global smartphone shipments by an impressive 29 percent annually from 51.8 million during Q3 2018 to 66.7 million in Q3 2019. Huawei captured a record 18 percent global smartphone marketshare in Q3 2019, up sharply from 14 percent a year ago. Huawei surged at home in China during the quarter, as the firm sought to offset regulatory uncertainty in other major regions such as North America and Western Europe.”

That’s an understatement if we compare SA’s global numbers with Canalys’s China ones from yesterday. Canalys has Huawei’s shipments in China alone increasing by 16.5 million units, while SA has its global shipments increasing by 12.5 million. In other words Huawei shipments to everywhere except china decreased by 4 million, which is considerable.

There’s something odd about those Huawei China numbers. To suddenly grab 18 points of market share in such an incredibly competitive market stretches the limits of plausibility. But even if we assume the numbers are legit, Huawei must have made some pretty exceptional business moves to pull them off and we have to question how sustainable they are.

 

The killer 5G app will be the one which changes behaviour – Orange

It is highly unlikely the telcos will be able to find the silver bullet to justify all 5G investments in a single swoop, and what we’re talking about today is unlikely to cut it.

There were a couple of applications which defined the 4G era, though 5G is gearing itself up to be much more complex. Justifying the expense on 5G infrastructure will be much more of a long-burn for the telcos, as one of the pre-requisites will be the alignment of all the moving parts such as the app economy, fibre deployment, changing consumer behaviour and IOT embedding itself into the world.

This is the complicated message which Patrice Slupowski, SVP Digital Innovation & Chief IoT Officer at Orange put across this morning, and the cornerstone of this vision will be data.

“The apps which will make the biggest difference will be the ones which change behaviour,” Slupowski said at Total Telecom Congress this week.

Perhaps a perfect example of how this can be brought together takes a look at health and lifestyle apps which are becoming increasingly popular throughout society.

There is of course a horde of new devices, products, applications and services which track and measure everything from the number of steps you take each day through to the depth of sleep throughout the night. These are simple usecases of connectivity, but when you start to use this data more intelligently, creating services (both private and public) from the insight gathered it becomes a lot more interesting.

This is where investments in IOT, fibre and mobile connectivity (both 5G and LTE-A) become more apparent. In this example, consumers are becoming more informed about their lifestyles and activities, but the knock-on effect could be more predictive and maintenance-based healthcare regimes. Practitioners can keep track of patients without unnecessary visits to clinics, and on the occasion a visit is necessary, data is significantly more accurate allowing for more personalised healthcare programmes.

Healthcare is the example here, though this should be applied to every angle being worked with a 5G swing. Whether it be in an industrial context for smart factories or connected harbours, or on the roads with intelligent signalling or autonomous vehicles. These are usecases which fundamentally change behaviour, either consumer lifestyle or the way a business runs.

This is perhaps why 5G will be a slow-burn to generate ROI. When you combine 5G with IOT, the cloud, AI and the ever-increasing computational power being offered as a commodity, the real value of data starts to be seen. This is when 5G will start to change the way society and enterprise function, and when it could be seen as a winner.

Xiaomi goes Suomi for camera research

The Chinese smartphone maker Xiaomi has set up in Finland its largest R&D centre outside of China for imaging technologies.

Xiaomi announced today that it has opened an R&D centre in Tampere, west Finland, to focus on smartphone camera technologies, including camera algorithms, machine learning, signal processing, and image and video processing. This will be Xiaomi’s largest Camera R&D team outside of China, the company says.

“The setup of this R&D team in Finnish city Tampere is a milestone in our global expansion journey. In this journey, not only do we consolidate ourselves in operations and business, but also work with local talents to further improve our products with highly innovative technologies,” said Wang Xiang, Senior Vice President of Xiaomi, adding that “this move all the more highlights our longstanding commitment of ‘innovation for everyone’.”

First reported by the website Suomimobiili.fi, Xiaomi’s local business entity, Xiaomi Finland Oy, was incorporated in May, and has rented an office space for around two-dozen employees at the Hermia Technology Park (Hermia-teknologiapuisto), not far from the University of Tampere’s technology campus, which is rated as one of the leading facilities in imaging related research.

Tampere used to be a key R&D centre for Nokia, giving the Finnish phone maker the leadership in camera phones. As Xiaomi’s press releases acknowledged, Tampere “has been greatly contributing to camera and imaging related innovations of leading smartphone brands since the 1990s.” That legacy is not lost. According to an earlier report by the local newspaper, Aamulehit, Nokia entered into a significant patent licensing agreement with Xiaomi two years ago.

Jarno Nikkanen, one of Xiaomi’s first Finnish employees and the Head of Xiaomi Finland R&D, was a Nokia veteran, with a PhD in signal processing from the Tampere University of Technology (now merged with the University of Tampere). He started his current role in June, according to his LinkedIn profile. “Xiaomi’s philosophy has been innovative and highly engaging. It’s all about empowering the teams and individuals to find solutions on their own. What we’re developing in Tampere will end up in the hands of hundreds of millions of users and Mi Fans around the world. That is really motivating,” said Nikkanen in the press release.

Xiaomi was not the first smartphone company to tap into local talents in Finland following the capitulation of Nokia’s phone business. Huawei set up its first R&D centre in Helsinki in 2012, to conduct new technology research for mobile devices, then a new facility in Tampere in 2016, to focus on camera, audio and imaging technologies for consumer electronics.

Networks need to be built for IoT not smartphones – Sprint

If telcos are going to back the IoT trend to realise the promised fortunes of the digital economy, are they building networks to fulfil this ambition?

This was the question raised by Ivo Rook, SVP of the IoT business at Sprint, at Total Telecom Congress. If telcos are still designing networks with the smartphone in mind, then the pot of gold at the end of the IoT rainbow may well be raided by rivals.

“If we think the world is going to change and networks are going to be at the centre of that, we should be thinking about how we are building networks but also why we are building networks,” said Rook.

“If the smartphone is the usecase of the mobile network today, then what is the usecase of tomorrow?”

The team at Sprint has taken a slightly different approach to many telcos and the result is the construction of a fully-virtualised network, which runs on bare metal servers, designed exclusively for IoT, which is known as ‘Curiosity’.

While it might sound like a simple idea, the best ones often are.

Rook highlighted traffic is separated at the radio, before being driven towards separate and dedicated network cores. One network is designed for the behaviour of smartphones, while the second is designed for IoT devices and applications. These are two different segments, which create different challenges, therefore it is only logical to create two different networks.

And when you look at the numbers, it does raise the question as to why more telcos aren’t taking this approach.

The smartphone segment is one which is likely to remain profitable in the long-run, though growth is only estimated at 2%. You can of course build a business case around this, but the levels of CAPEX required are eye-watering. It will be more expensive to build a dedicated IoT network to run alongside, but the financial projects are much more attractive.

According to EY, the number of IoT connections worldwide is forecast to hit 25 billion by 2025, creating a market which could be worth in the region of $1.1 trillion. However, one of the drivers of this segment is the progress of computational power, the rise of cloud computing and the decreasing price of connectivity. These are three segments which are accelerating their progress, suggesting the top-line estimates on revenues could be conservative.

As there is only so much growth left in the smartphone world, and the consumer’s data appetite is aggressively increasing, profits are looking less and less attractive. These are the trends which are driving telcos to diversify, however if the same approach is applied to the networks for different usecases, is the potential going to be realised? Its all about creating the right tools for different jobs.

The question which telcos need to ask themselves is where do they foresee the greatest profits in the future. If it remains in the smartphone world, then fair enough, design networks the same way. However, for enterprise applications and IoT, as Rook highlights, perhaps there should be a shift in mentality for prioritising network demands and design.